Forex: AUD/USD drops to 1.0250 area after capping at 1.0308 high

FXstreet.com (Barcelona) - The AUD/USD rose to 1.0300 ground during the Asian session for a test of resistance, printing a high at 1.0308 before progressively, now at 1.0250 area as the European session unfolds. The Aussie may get pressured by this weekend’s reports that the Australian government may have taken a AUD7.5 billion revenue hit since October and that the budget deficit may come as high as AUD20 billion.

“A respected think-tank (Grattan Institute) claims that the fiscal situation is in such bad shape, expect a 'decade of deficits'. Both the current Labor government and opposition coalition admit fiscal surpluses are a long way down the track with revenues taking a hit from lower commodity prices. The budget is brought down May 14, but we believe deficits are unlikely to impact the AAA/stable rating as deficit and debt metrics remain a fraction of those in Europe and the US”, wrote TD Securities analyst Annette Beacher.

While capped here (1.0398/1.0440), the market will remain directly offered. We should see a slide to 1.0204/16, the 11th March low and 78.6% retracement en route to the 1.0116 recent low”, wrote Commerzbank analyst Karen Jones.